Repairs and expenses are deductible, but you only get back the taxes you would have paid, so you are spending a dollar to get back a quarter.

You need someone that knows the current laws and what disclosures you need to protect yourself.

If the consensus is that I should agree to rent to them, as the landlord, how should I articulate the leasing terms in writing to protect myself? 

I prepare and protect against the works case scanario.  

Just kiddin'.Anyone going through foreclosure has several things going on: 1) They are under a lot of stress, 2) Everybody is mailing to them and knocking on their door, 3) They are embarrassed, 4) They feel helpless, 5) They have the belief that winning the lotto will bail them out at the last minute, 6) It's the bank's fault, 7) This can't be happening to them, 8) They don't want to sell, 9) The house (even though it has a leaky roof and hasn't been kept up) is worth more than market price, 10) Believe you are there to take advantage of them, 11) Believe the government should do more to protect them, 12) Believe that their payments reduce the principal directly proportionate to their payment (Have no concept of compound interest, what Einstein called "the 8th wonder of the world"). 13) They can file a Chapt 13 bankruptcy at the last minute and keep the house if they have income, 14) They will wait until the day before the sale and call you if none of the other solutions work.Your opening comment should be " I buy houses in the area and I was wondering if you or someone you know might be interested in selling".

If there is a mortgage on the property you are required to use an escrow service this protects both buyer and seller to ensure the mortgage is being paid and the property is not sold again. 

While many agree the accredited status is high, there are reasons for it (namely to protect everyone involved, especially the investor) and the SEC has also allowed non-accredited/sophisticated folks to invest in these types of deals through a different structure - the 506(b).It is 100% okay for you to reach out to Sponsors or other people putting together the deals you're referring to.

He also called the Department of Environmental Protection because these folks have trash and debris all over their lot, he said the DEP is making them clean it up.  

Until you officially take ownership you have no authority to offer any changes.You need to spend time studying your state landlord tenant regulations.

If I were a halfway decent tenant and my landlord told me that my kids and I don't get to have heat for four days because he didn't want to spend a few bucks on an HVAC tech, that would not sit well with me.